First timer running the numbers

[Justin Trudell]

I'm a first time investor running the numbers on a triplex in central MA. 200k purchase price, 20% down payment and 5% mortgage. 3 units all rented at 1000 per month with assumed vacancy rate of 25%. Turnkey property, so assuming 5k in improvements, 4k in closing costs. Annual numbers assumed (3k taxes, 4k maintenance, 1k insurance, 3k for PM/admin fees). Total money down assumed to be just shy of 50k. My calculator is showing annual pre-tax cash flow at $5,643 which equates to an ROI of ~16% pre-tax. What am I missing here?

[Shaun Reilly]

There are lots of other things that might be factored in.

Is there any common areas that you will have an electric bill? You should account for landscaping and snow removal since it is a multi. Is there any garbage collection fees (Not always but sometimes have those on Multifamily)? Do you pay water and sewer or are they all separately metered (pretty uncommon here)? I will assume that they all have separate heating systems that are tenant paid since you didn't mention that. Things like Legal, Accounting, Marketing etc. can all be things that you would want to account for even if just as a miscellaneous/fudge factor.

That being said with that giant vacancy rate and pretty healthy maintenance line item the numbers look pretty solid.